“Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Chad Wollen, chief marketing officer at Smartpipe.
With consumer trust in brands at such a low point it is worth reflecting on a home truth: Companies neglected to put the producers of “big data” – consumers – at the heart of their approach to data.
The General Data Protection Regulation (GDPR), the latest step toward building a more transparent relationship between companies and the public, represents a boiling over of concerns about data use.
Far too often, the general attitude appears to be one of companies gaming to see how rules can be observed without the overall spirit being fully embraced. The next, and arguably bigger, step is the ethical one, because it is about companies acting on their own, not because they are ordered to, to do the right thing.
What is clearly needed is a set of ethics that steer what companies can do with data – a set of truths that the industry holds to be self-evident.
In April, the industry was given a good starting point with the World Federation of Advertisers’ call for companies to adhere to a four-point plan to improve data policies. If meeting consumer needs is not enough to drive change then maybe meeting the needs of advertisers will be, and data safety initiatives can follow other moves within the industry to address issues around brand safety and accountability.
The aim of this manifesto was to create strong governance around how each company processes data, minimize how much is collected and provide consumers with real control and choice over how their personal information is used.
Finally, companies must take active control of how data is handled in their digital supply chain. It is not enough to tick their own proverbial boxes while clients and partners are not adhering to best practice. This is not lost on the membership of the WFA, which are brands that depend on an emotional and rational connection with consumers.
Taking trust to the next level
This is a good starting point, but to take a customer-first strategy to the next level, companies should restrict their consumer relationships to always being based on explicit, informed consent and only for purposes that can be clearly explained.
There is a need for a new type of customer relationship – perhaps a social license through which permission to use data relies on maintaining mutual trust and respect.
There is no one-size-fits-all approach for this, but a good example of what it might look like has been drawn up by a small team of academics and practitioners in Mexico and Canada. They describe the four steps consumers must be helped through to grant a business what they refer to as a “social license.” The steps are withdrawal, acceptance, approval and identification.
Consumers must first be communicated with so that they won’t withdraw from, or ignore, a business. Ideally, they should then accept what the business can do for them and approve of the relationship when shown their trust has been well placed. Finally, consumers are then ready to identify themselves with the brand.
This can only be achieved by forging new open and transparent relationships with customers that are built on mutual respect and trust. It is the sustainable approach and goes well beyond bringing in the lawyers to ensure systems are compliant and choosing instead to focus on an ethical code which uses language like respect, dignity and happiness to describe outcomes.
To achieve the people-centred outcomes required of ethics, companies must invest in new technologies that demonstrate and underpin this commitment and turn fine words into deeds.
Ethics that push up the bottom line
This is not only useful in marketing; the decision to act as an ethical company can benefit the bottom line too. In May, Unilever revealed that 70% of its turnover growth for 2017 came through its sustainable brands.
Similarly, Forbes recently reported on Nielsen’s global corporate sustainability work. Two in three consumers are willing to spend more on products from sustainable brands, a proportion that rises to nearly three in four among millennials. Four in five millennials expect brands they like to make a public declaration of their corporate citizenship, a rallying call for what they stand for.
This all points to the fact that the way consumers interact with companies is changing. As in any walk of life, they want a relationship that is trusting and mutually respectful. For them to identify with brands they need to know that a company not only accepts their values, but shares them and invests in delivering on them.
Follow AdExchanger (@adexchanger) on Twitter.